ANALYSIS-Georgia rebel confidence rises after fighting

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By Conor Sweeney

MOSCOW, Aug 13 (Reuters) - Georgia’s efforts to bring the breakaway region of South Ossetia to heel have backfired so drastically that it may have lost control of both it and rebel-held Abkhazia for good. Western diplomats and analysts said Georgian President Mikheil Saakashvili has little hope of reasserting his authority in the two regions after his failed invasion of South Ossetia.

A ceasefire agreement to end nearly a week of fighting between Georgian and Russian troops has given a new sense of confidence to the separatists in Abkhazia, and in mountainous South Ossetia and Abkhazia, which hugs the Black Sea.

Sergei Shamba, self-styled foreign minister of Abkhazia, told Reuters that Georgia should now accept it is a separate country.

"We have held talks with Georgia for 15 years and now we will only talk with them after recognition of our independence," Shamba said.

"There have been several drafts and they rejected them all. It’s clear to me that it’s pointless talking to them."

Self-styled South Ossetian President Eduard Kokoity made similar independence demands on Wednesday, Russian media reported.

Georgian troops struck at pro-Russian South Ossetia last Thursday to retake it from separatists but the action provoked a massive retaliation from Moscow, whose troops drove the Georgian forces back.

At the same time, fighters in Abkhazia pushed back Georgian forces from their last stronghold there.

The result is a new power balance in the region.

"Militarily, Russia has achieved its strategic goal. It has demonstrated its ability to strike," wrote stratfor.com in an analysis.

"Russia ejected Georgia completely from Abkhazia and South Ossetia and has largely destroyed Georgia’s war-fighting capability.

"And with talk of ‘partial demobilisation’ as a condition for peace, Georgia could be hobbled for quite some time."

Moscow may take different approaches to the two regions, said the editor of Russia in Global Affairs, Fyodor Lukyanov.

Neither should be directly compared with Kosovo, which unilaterally declared independence from Serbia this year with the backing of many Western countries.

"The difference between Abkhazia and Kosovo is that the U.S. was able to mobilise 40 countries to recognise Kosovo but Russia can’t expect any single country to do it — not even Belarus or Armenia," Lukyanov said.

CONFLICT COULD REMAIN UNSOLVED

One scenario would be for South Ossetia to achieve independence eventually before being absorbed into Russia, though Abkhazia may look to countries like ex-Yugoslav Montenegro, as an example for its future.

"Abkhazia is weak but a de facto state whereas South Ossetia is not self-sufficient, Georgia is not an option anymore so it can exist only as part of the Russian Federation," Lukyanov said.

Although Abkhazia is belligerent towards Tbilisi and says it has now taken full control of the Kodori gorge — the one district of its territory Georgian forces had held - Shamba took a softer line towards the United States.

"Against America, we have no problems, they did not give these weapons to be used against us. This is a geopolitical question," Shamba said.

The United States has been Tbilisi’s strongest Western ally since the 2003 "Rose Revolution" brought Saakashvili to power.

But following Kosovo’s independence — which Moscow opposed on the grounds it would set a precedent for other frozen conflicts — both the Abkhazians and South Ossetians redoubled diplomatic efforts.

Despite its financial and political support, Moscow has never said it will recognise their independence.

Western diplomats think Moscow has more to gain by maintaining the uneasy situation than resolving it.

"It’s clear that there has never been a great incentive for Russia to solve these problems as it keeps Georgia dangling," said one Western diplomat familiar with French peace efforts. (Additional reporting by Oliver Bullough in Sukhumi; Editing by Angus MacSwan)